Using items instead of Stardust for Enhancement

What does Lvl 7+ refer to?

Items Lvl 7+ can be used instead of Stardust according to the Enhancement NPC.

Does that refer to the level requirement of items (so I could use a Lvl req 10 armor to Enhance my Lvl 10 req weapon) or does that refer to the Enhancement level of the item (a +7 or higher Enhanced item can be used to Enhance another item)?